Real Estate Bubble & Holding Realtors Accountable For Listing Prices

[celilola]

Buyer's agent. Probably yes. Around here. Seller's agent has no fiduciary duty to buyer. Dual agency requires agent to be neutral unless parties involved authorize otherwise. Have spoken to numerous buyer's agents in multiple competing offer situations above list price. They have all told me that they inform their clients that their offer is overly aggressive and the property very well may not appraise. Most contracts have appraisal contingency. But I am seeing more where buyer agrees to pay out of pocket if appraisal comes in below purchase price.

I dont know what you mean about "around here", when I took my classes, the Fiduciary Duty was in the national courses-not state specific. I very well may be wrong, I dont remember a lot of a lot of things, but maybe "around there" the Realtors aren't doing their jobs properly. Dual agency is another beast altogether, and If I remember correctly, its state by state-not all states allow it so there may very well be different rules.

 

[djd09]

Dual agency. There is another winner. How funny is it they represent both and take a percentage of the price. No possible conflicts there.

 

[Dublin ohio]

Agreed...the highest price POSSIBLE.

And what does "possible" mean. OMV for appraiser is based on "probable" price. Take the appraiser out of the equation. If in your opinion. The list price is 70k too high. But informed buyer pays cash.at list price. Then it was "possible". I have seen re agents do the exact opposite and price a property substantially below market in a hot area just to get a bidding war started. More often than not. The property ends up selling at very top or above current market in a very short time..

 

[Terrel L. Shields]

Shouldn't the Realtor (while upholding their fiduciary duty to the buyer) be informing them that their offer may be well out of the range of market value?

I dont remember anything about "buying the listing" This is exactly my point...they arent acting in their clients best interest when they do this.

Really, it's not my problem.

 

[Gobears81]

Two thoughts-one is that when I did more residential work, the highest sales were often in the very early spring periods. Central IL has a slowdown in sales during the winter but it comes back twofold in the spring and all else equal, early March is a great time to sell around here. Maybe not a great comparison for hot weather Arizona, but still thought I'd mention that.
Two-the toughest markets to value are ones in the early stages of flux...There is limited data to support that it is changing, and even though we know something is happening, putting a price point on it is a genuine challenge until the trend reveals itself. Changing trends are often not a smooth downward or upward slope-sometimes it jumps up or down suddenly.

 

[EddieB]

Six months ago is half a year. What are the other listings saying?

 

[gregb]

Vero forecast-

http://www.housingwire.com/articles...west-coast-housing-markets-will-dominate-2017

 

[J Grant]

RE agents and brokers have no duty, fiduciary or otherwise, to list properties in any relation to our conception of "market value", nor to negotiate a price that reflects market value, or that is reasonable, fair, etc.. Their duty is to get highest price for seller period the end.

The fault lies with that segment of appraisers who design their appraisal around supporting the SC price. Of course a SC price deserves consideration, but it is not by fact of its existence "market value" (at least for appraisal purposes).

A sales price means a buyer is willing o pay X $. . however if financed, the buyer may only be willing/able to PAY X$, if they can borrow it.

In financed Sales contracts, the lender is the one to foot the bill for LTV based on X$, and that is contingent on appraisal green lighting X $ as the market value opinion, If an appraiser designs the appraisal to support the SC price, the SC price is not actually vetted for market value, is it.Which in turn skews market prices if such a sale closes and becomes a next comp. .

There is a reason why the verbiage in the definition of market value states "the most probable price the property should bring"; and not "the most probable price a buyer is willing to pay ."

 

[Ariba]

Listing broker has a duty to their client (The Seller) to get them the highest price possible for their property.
On the other hand, they are human and in tight markets, they WANT that listing, it's their bread & butter.
In my years selling, over pricing the property to get the listing was called "Buying The Listing"
Not good practice, but, it was done all day, every day, throughout the Country.

OK. What is the Buyer's agent duty to their client (The Buyer) to get them the lowest price possible for the property?

 

[Don Clark]

OK. What is the Buyer's agent duty to their client (The Buyer) to get them the lowest price possible for the property?

Two different things. A selling agent has a duty to obtain the highest price for their client. The buyers agent has a duty to get the lowest possible price for the property. The appraisers duty is to opine a value consistent with careful analysis of the market.

Don'y confuse one with the other.